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Mexico: Pemex Executives Under Investigation - 2002-01-23

Mexican Comptroller General Francisco Barrio has brought a legal complaint against officials of the state-run oil company, Petroleos Mexicanos, generally known as Pemex, for fraudulent fund transfers. This follows accusations against Mexico's former ruling party and its candidate in the 2000 presidential campaign that have shaken the nation.

In the complaint, Mr. Barrio accuses Pemex officials of diverting over one billion pesos, around $120 million from the company's profits. The Mexican attorney general's office says three company officials are being charged, but that more Pemex managers and government officials may be targeted as the investigation goes forward.

Over the past weekend, Mr. Barrio said he was investigating the possible illegal transfer of funds from the state-run enterprise to the year 2000 presidential campaign of Francisco Labastida. Mr. Labastida was the candidate of the Institutional Revolutionary Party, or PRI, which had ruled Mexico uninterrupted for 71 years until the victory of current President Vicente Fox.

On Tuesday, Mr. Labastida denied any knowledge of illegal funds in his campaign. He said the only resources used by his campaign were the ones he reported to the Electoral Institute during the election period. Mr. Labastida refrained from answering further questions, saying that since there is an investigation underway it is necessary to wait until it is finished. The current president of the PRI, Dulce Maria Sauri, has rejected the accusations of illegal fund transfers from Pemex and has accused the Fox administration of trying to create a pretext for privatizing the state-owned company.

The corruption charges leveled at the PRI come at a time when the former ruling party is struggling to find new leadership and to avoid fractures from within. The party is preparing for an election next month to choose a new leader.

Many voters who supported Mr. Fox in the July 2000 election were disappointed when he failed to investigate and prosecute former government officials who had benefited from the old system. Political analysts speculated that President Fox refrained from angering the PRI because his own party lacked sufficient votes in Congress to pass his reform proposals. But the PRI has blocked all but a few Fox initiatives anyway and totally obstructed the Fox plan for overall fiscal reform during the final Congressional session last year. Now, some analysts say, the president may feel he has little to lose in taking on the PRI and exposing past corruption.